[LINK] Whatever happened to Fairfax?

[Frank O'Connor]

On 19/06/2012, at 10:04 AM, Jan wrote:

> At 03:18 AM 19/06/2012, Frank O'Connor wrote:
>> An application that freed consumers from relying on single sources 
>> for continuously updated news and current affairs (for example that 
>> allowed me to plug in Reuters for economic and business affairs, 
>> numerous local sites for local and Australian news, various overseas 
>> publications for news of the world, various specialist sources for 
>> sports news on AFL, Cricket, MotoGP, Grand Prix etc etc) through a 
>> single UI ... in effect providing an individually tailored news 
>> source ... is probably not far off being realised.
> 
> A guy on ABC radio this morning called in about a subscription 
> service he uses called Press-something at $30/month. Jon Faine did 
> his main segment first thing with Bruce Guthrie and Michael Gawenda, 
> mostly focusing on the gaps, like regional access, those without 
> computer skills, and those who can't afford computer equipment and 
> online service costs.

Who can still make use of the still pervasive broadcast (TV, Radio et alia) model quite nicely using their televisions, radios and other consumer devices. Besides which, print isn't going to die over-night, so their rheumy old eyes can peruse the text for probably a decade or two yet. (Whether it's worth perusing when once respected journalists are already offering their own prescriptions for what they perceive as the body-politic's ills is another question ... but print hasn't received its last rites yet.)

> 
> I tend to think of online news as 'free', but I'm actually just 
> spending my money on different aspects of the transaction, and that 
> isn't going to the content providers. I also have adverts blocked, so 
> they don't even get to legitimately count my eye-balls!

OK ... but its not all dark and foreboding ... a few comments: 

1. Bandwidth providers and big comms companies could provide content to add value to their services.
2. Subscriptions can work ... it's simply a matter of tailoring it to product. I'd get a bit snarky if for example Fairfax wanted to charge me twice if I elected to subscribe to multiple Fairfax banners ... say the Age and the SMH ... for what is essentially the same content.
3. Advertisers could provide funds for embedded copy in articles.
4. Government and industry could subsidise it.
5. Specialist publications could be funded out of industry ... from their PR and marketing budgets
6. Academic publishing looks like taking up a lot of the slack left by fading conventional media outlets. Even in Australia I can name you four large generalist media sites operated and contributed to by academics and experts. And for specialist sites ... academia can't be beat.
7. Online-only is a hell of a lot more efficient and economic that running online and conventional channels in tandem ... especially the way Fairfax did it ('never the twain shall meet'). I'd estimate that the costs (outside of the journalism) would be less than 5% of cost of printing and distributing conventional copy ... 
8. Citizen journalism is making a big comeback.
9. Public contributions have a role. It's never been big in Australia but in the US and parts of Europe public journalism (on the PBS model) has a long tradition. No reason it can't take off here.
10. Big-End Philanthropy could play a role ... it definitely has in the US, and there are a couple of news sites in Oz funded from this source.

For broadcast media, I'm not so sanguine ... I just don't see that they have the relevance, range of service and capacity to deliver real time product that the consumer wants to see - that distributed sites on the Net can't deliver better and cheaper. Especially for Pay TV providers like Foxtel.

I was amused by the reaction of the media and journalists to the latest Commission of Enquiry (basically it was leave us alone, we know what we're doing, don't interfere with freedom of the press) as if none of them had given any thought to their business model, and that all was not well with the world if we let them stumble along the way they've always stumbled along in. Many proprietors and journalists would no doubt like to solve the whole problem by banning the Internet ... but that particular genie is so long out of the bottle now it can never be put back in. Any way you look at it, media outlets look like increasingly being in bed with industry, government and traders more than ever over the next few years. The need for advertising, promotion, marketing and the like won't go away ... it's simply a matter of billing rationally for same and reducing production and distribution costs to a minimum (which shouldn't be hard on the Internet).

The big problem for them will be maintaining their credibility ... that priceless asset without which they are nothing. 

> 
> What happens to the traditional advertisers? I don't have much 
> sympathy, but that is another component of the ecosystem. Classifieds 
> are moving to local free papers and online services.

And are much more convenient than sifting through a couple of kilos of dead tree to find what you want. Need a car? Filter by make, model, price and location ... and you instantly have a raft of contenders. Looking to buy a place? Same. Want a boat, or a motor bike, or the latest used widget? Same difference. Database is much better than paper.

The defining characteristic of all this is that the middle man (and the media they advertised in) is becoming way less crucial to the transaction. 

Trading Post now exists in digital form and is updated continuously (as you read it) ... classified ads in a newspaper (and the associated river of money) simply cannot compete with that.


> 
> What happens to the free local papers that are also part of the 
> fairfax and news stables? They are fully advert supported. So the 
> business model must work in a micro way. Stories are local, too.

Well, given that most have been an advertising masthead for local businesses rather than a source of hard news I don't see that as a problem. I mean 60% of the news items deal with local business and PR, 20% are local news items and 20% are related to 'other'. Local papers have always been money making machines for the big chains ... simply because of the returns from the massive amount of sold advertising. (70-80% of the page space seems to be taken up with advertising.)

What we're now living in is a state of affairs where the advertiser can get feedback on the performance of their ads in real time. That applies to international, national and local advertisers ... and given that these figures can be so easily extracted, it should be possible to bill same at appropriate unit exposure rates to whatever app, site or outlet that provided same in its content. 

This of course opens the media up to charges of bias and corruption of content viz-a-viz the advertisers, but given that credibility of their most precious asset I can't see that being abused as often as some would think. It hasn't affected most major rags published nowadays, so I doubt it would be a huge issue in future.

I suppose what I'm saying is that the current media outlets will have to get a hell of a lot more creative with their business models, revenue sources and distribution channels over the next few years. After Gutenberg the average town crier probably knew his days were numbered, but probably acquired a new set of skills (e.g. the ability to read, the ability to sell product with his voice, the ability to make products and services sound and look attractive) and one of them may have invented advertising to supplement an ever-diminishing income from town crying. People and industries tend to be a hell of a lot more creative and inventive under stress (hey, look at war-time economies) so it's not all doom and gloom.

Just my 2 cents worth ...